Why Is Crypto Crashing? Congress Proposes Major Regulatory Shift with CLARITY Act

The cryptocurrency market faces renewed volatility as regulatory uncertainty takes center stage. The newly proposed CLARITY Act in Congress seeks to fundamentally reshape digital asset oversight by reclassifying most cryptocurrencies as commodities under CFTC jurisdiction, stripping the SEC of primary authority.

Representative Bryan Steil frames the legislation as a strategic move to maintain U.S. competitiveness in global crypto markets. The bill’s introduction follows years of regulatory ambiguity that has stifled innovation and institutional participation.

Market reaction reflects DEEP skepticism toward congressional effectiveness, with approval ratings at historic lows. Traders appear unconvinced that Washington can deliver the regulatory clarity the industry demands after repeated false starts.